>> there's a word -- >> it's a canal. i don't know. big long one you can do. >> we managed to use it all of the way to the end. >> we're done. >> thank you for joining us today. join us tomorrow. right now it's time for "squawk on the street." good morning. welcome to "squawk on the street." i'm melissa lee with carl quintanilla, jim cramer and david faber live from the new york stock exchange. let's look at our how we're setting up on futures here. a rocky ride in yesterday's session as comments from harry reid and mitch mcconnell sent stocks to session lows. this morning we look to open to the downside. implied open down 25. s&p looking to lose five. beige book home sales ahead. as for picture in europe, a bailout for four spanish banks getting approval from the eu. still stocks are down. italy down by almost one full percentage point. road map for the morning starts

off with the fiscal cliff. the president meeting with more ceos today bringing his plan straight to the people culminating in an appearance in a factory later this week. >> costco joins the dividend parting initiating a $7 a share payout on top of the regular dividend. >> and a shake-up at groupon. the board may be considering co-founder being released. >> there's powerball fever. 500 million big ones in the pot. how would you spend the money and how does the fiscal cliff factor in? we'll talk strategy with a former lottery winner. >> we begin with the fiscal cliff. this afternoon president obama is scheduled to meet with several business leaders including ceos of home depot, macy's, caterpillar and at&t but futures are falling with signs

there are troubles with negotiations on capitol hill. a market credible deal to solve the cliff is key to economic growth. >> that annual growth idea, that prospect is real in my view if we actually did get a market credible $4 trillion plan. the markets would realize those guys can govern. the big question is can we get a market credible plan. what would it look like at this point? >> senator reid said we won't have one. everyone has to get used to that. warren buffett talking about going over. probably going to happen in january. i feel like we're going to go over. you can meet with all of the ceos you want to. doesn't really matter. 200,000 people in a room. doesn't really matter.

norquist saying don't have a deal. have to raise taxes. democrats don't seem to favor lowered defense budget and favor higher taxes for the rich and so we're done. i think we're done. >> after durbin speoke yesterda, if you're going to get a blueprint, he doesn't want entitlements be part of it for next year. >> it's the 1,000-point solution. maybe that will change their mind. durbin said no. norquist is saying no tax increase. what else is there? am i missing something? what am i missing? blankfe >> stallen made a lot of sense. mass murderer about you doesn't mean he didn't make sense. >> blankfein, kent, mayer,

roberts of comcast. is there anything these guys can say to change their tune? to get people -- >> we're just past thanksgiving. let's give it a little time. things can change. we've seen lots of back and forth. everybody is establishing their negotiating position. there's still a negotiation to come in some way. i'll take the optimistic view. >> maybe that's where they are starting from. >> a reset button? >> we have yet to get in there and see whether in fact there can be the ability to knock heads around and really figure something out here from the executive, the chief executive, that being the president and the leaders of both sides whether it be boehner and whether he can control his side of things and/or reid in the senate and whether we see moderates step up to try to get something done. i'm not willing to say as you seem to be that we're done. >> i think -- i don't know if we can get it done -- the clock is ticking.

there's not that many more days. >> there aren't. if we go into january, it's not going to be the absolute end of the world. if we do get a deal. if you get a deal january 29th, i'll be, like, great. awesome. >> i'm taking the buffett point of view. there won't be a deal in december. could be a deal in january. buffe buffett interview on "squawk" this morning was brilliant and he laid it out. >> the white house is going on twitter with this new hash tag my2k referencing the amount taxes would go up. people are asking whether they are still trying to campaign. are they doing that at the expense of having negotiations and having telephone calls and meeting? >> let me say that if you own altrea, it's great.

it's important to point out who is pro shareholder. a lot of that is on senator mcconnell. before we slam him, let's remember what he's done. now i've made that point like larry kudlow you now annihilate the guy. when you meet with business leaders, they feel same. don't go over the cliff. profits will go down. going to are to lay off people. that sounds like common sense. has that played any role at all, common sense? >> clearly not. here we are with just days until the cliff happens. >> we keep talking about the cliff as though we're not going to wake up on january 1st. >> you think it's more of a y2k? >> no. i think it's out of hand here. >> i think that there's a stock market -- >> we'll wake up with an incredible deficit deduction in place. >> i plan to wake up with a big

hangover. >> if we would go ahead with sequestration and increase in tax rates, they have to be happy. where is santelli on this? >> he does wear a pin, santelli. it's a good question. >> look, i just think that it is true that january may not be a debacle. as someone that cares about -- let's put my cards on the table. higher stock prices. we ain't going to go in that direction. it's not good for the stock market. >> we hear it all the time from business leaders. i heard it yesterday. head of north american m&a. if you get me a deal, i as ceo am going to make significant decisions that i'm not making now. >> there it is. it's the decisions. it's the decision to hire. decision to invest. it's a little dicey. you don't know what the world is going to look like. i think that the guy i care

about may be more than the people meeting with president is jpmorgan head of m&a. these are few and far between. i spoke to ceo of pbh after interview he said i want to make money for shareholders taking advantage of the fact that interest rates are low. they're not looking at interest rates lower just trying to figure out what the world is going to look like. let's not do deals. stock market goes lower. >> the president will speak today at 11:35 a.m. when he does at the white house, we'll bring that to you live. speaking of the cliff, costco now joining the ranks of companies announcing a special cash dividend. $7 a share. warehouse retailer reporting a jump in same-store sales beating consensus. a good month if you look at low gas inflation. food deflation.

currency not as dramatic in effect. another big food grocery chain posting a number line thalike t. >> do a lot for shareholders. a company that does a lot for employees. it's a model company. shows you can make a lot of money. one of the reasons they wanted to buy is because of the private selling label for costco widely considered to be better orred a good and branded. >> it's a $5 billion payout on the special dividend. >> it looks like they would go to credit markets to fund the dividend. that's how they funded the last time around in 2007 they raised $2 billion. this time around in the press release they didn't explicitly say that but the cfo mentioned

the company's favorable access to the credit markets. >> which you hear all the time. which is story we still don't do enough because i don't think you can do it enough. we forget about that. the amount of cash flow that's been created as a result of being able to lower your debt costs, your interest costs, over the last couple of years is extraordinary. and we see companies -- listen, you file shelf. you need to have it. i don't know how they're going to fund it. you can go to a capital markets and fund a special dividend or fund a significant buyback and have it with cash flow. that's something bernanke -- that's the untold story in some way that has been certainly he would hope more would come of it. low borrowing cost. it's been amazing. >> amazing. >> you pointed out, david -- >> it may be a bubble we're building now. >> amazon borrowing at a rate that looks like what the

government should borrow at. if amazon expands the way it should, it brings down the cost of good for everybody. >> look for companies with big percentages of family owned stock. insider owned stock. there's a couple lists floating out there, jim. some of them are very low market cap. names i don't know who you are comfortable mentioning. >> let's look at this list. put together by new edge. some names are interesting. top on the list is apple. we had a conversation about how they could pay a special dividend. they have a lot of free cash flow. not just cash on the balance sheet. this is based on high cash positions and also high percentage of insider own othership. insiders will benefit if their tax bills are lower. >> the payout makes what he spent during the campaign look like the cash in your couch. >> which is what he said when he was spending $100 million or whatever the number was. just a tip.

>> warren buffett to reference that fabulous interview he did this morning. a lot of people make $200 million and don't pay a lot of tax for dividends. >> other names mentioned on this show, nordstrom yesterday by a guest and then some others. franklin resources made a couple list. knight transportation. we're talking 20 plus, 30% of stock in some private or insider portfolios. >> it's interesting. if you want to look at some of the stocks that are mentioned, some of the companies are doing poorly. i don't think that they are natural candidates. we look at brown-forman doing well. costco doing well. i don't know. i would be -- i like yahoo! very much. i think she's doing a remarkable job. she's talking about using that money to do good things. maybe a waste to give it back immediately to shareholders. >> for a company like apple, to keep that much cash on the balance sheet is almost -- they say they are taking a fiscally

disciplined approach to managing cash. some would argue that it's fiscally undisciplined in having so much cash on your balance sheet and not using it toward better things or things that would yield more for shareholde shareholders. the stock has declined a lot since its highs. if they issue a special dividend, people would step in and buy the stock or at least hold onto it putting a floor in there. i don't know. maybe that's temporary. maybe that's enough until they get through the holiday season. >> if they beat the quarter and stock goes higher, nice to have a special dividend. i would like them to make the money and buy twitter and yahoo!. it would be game, set, match for them and they would have mobile and social. >> if we would get a deal, you might get more certainty and make larger risk taking investments as opposed to the less risk taking side of going back and returning money to shareholders.

>> do you have a cold? >> i have for days. every so often i can't breathe. i'm about to pass out. i'll be fine. >> yesterday was your hair. today it's your lungs. what body part is going to go next? >> it's unclear. >> did you pass me in age? >> i'm working on you. >> when we come back this morning, the fiscal cliff obviously taking center stage as it does every day. house budget committee member republican congressman jim lankford from oklahoma and phil lebeau has mark reuss live from the auto show and we'll look at where we get with another implied open down. a few of these in a row now. "squawk on the street" back in a minute. from local communities to local businesses. the potential of yelp unlocked. nyse euronext. unlocking the world's potential.

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>> shares of groupon rising. the company due to meet this week to discuss management changes including possibly bringing in a new ceo to replace andrew mason. shares have plummeted 80% so far this year. meantime, "usa today" reporting small businesses are leaving groupon off their list when it comes to sales strategy. the problem, they're not getting repeat customers out of the groupon deals. this is probably no surprise to you, jim. do you think that a more experienced ceo would lure in

shareholders? >> maybe a ceo is not in denial. >> not drinking beer at meetings. >> a conference call that was -- contrast him with zuckerberg. the conference call which marked the bottom in facebook was about how we screwed up. we didn't have a strategy. now we have one. you're going to be surprised how good it is. mason's is we have the best strategy in the world. everything is terrific. don't know what the critics are talking about. i would point out today that a $385 for $29. >> that's the first one. >> i believe in chiropractors. this is the first deal. maybe mason turned the corner in terms of deals. $300 value. >> that includes the brazilian. >> i know that simon went to brazil. i'm going to find out what this

whole thing is about. >> when you go to brazil you get a brazilian? >> i don't know. the trip cost like $1,000. trying to get it for 18 bucks. >> i like that. >> at the end of the day this is a company that should probably not have come public or should have sold itself to google when it had a chance at a significant number i believe. 6 billion. perhaps more. you look back at the ipos of groupon or zaynga, too early to buy? >> zynga could use a management shake-up. everybody has -- it seems like many don't want to be given to hyperbole. many executives at zynga are part of a shake-up except for the top guy. >> according to the journal a couple weeks ago turned over a new leave trying to be more inclusive. i don't know if you saw the story.

trying to be more of a people person as opposed to his earlier self. >> people can change. people can change. i saw a person in my life -- i have seen one or two people genuinely change. >> for better or worse? >> good point. >> multiple personalities. >> the three faces of zynga. >> the three faces of zynga. >> let's head to break. cramer has a message for you ahead of the opening bell. what is it and which stocks are in the mix? his mad dash is coming up next. powerball fever grips the nation to a tune of half a billion of dollars. words of wisdom from a lottery jackpot winner. we're ten minutes until opening bell here on wall street. implied open on wall street down 5.5. much more "squawk on the street" straight ahead. can i help you?

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>> he's putting on his jacket. that can only mean one thing. it's time for mad dash. >> what's interesting go green mountain is the question is what is it really worth? it was clearly not worth this much because the earnings were coming down as my friend herb greenberg talked about. was it worth 25 given the fact that basically its business is pretty good. there is a lot of competition coming in. some people think it's like the

stapling business, johnson & johnson came in and wiped them out. is that what could happen at green mountain? business is good. it's not fabulous. it's not terrible. we're still trying to figure out what price to put on a company. business is good. better than we thought. with a new executive coming in from a very good company. >> people believe starbucks is spinning a web around these guys and they don't see it happening. >> i think that's true. you do have an installed base. it's very hard. this is not a toaster oven. i'm not saying that you can pry it from my cold, dead hands. i do believe that they have an installed base and that gets better. it's not soda stream which is faddish. it's not a toaster oven. it's a fixture in a lot of people's kitchens. i'm sure the critics will say it's about k-cups. those sales were good. pretty good. >> there have been a few companies that people love to

hate that have had a good quarter or a good call or good guidance. is there a common theme there? >> if it's a trusted brand that has a product that people like, it's been surviving. i don't regard radio shack as having a trusted brand. advance micro. i don't regard nokia. research in motion to some degree people like that one. i don't like the stock because it had such a move. >> you talk about facebook in the same light as well. when we come back, faber has breaking news on knight capital all morning long. the question is how close is the company to finding a buyer? plus the controversy surrounding hp and autonomy. another faber story. what does it mean for management? our boss of all segments is coming up. this december, remem-

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go national. go like a pro. he loves risk. but whether he's climbing everest, scuba diving the great barrier reef with sharks, or jumping into the market, he goes with people he trusts, which is why he trades with a company that doesn't nickel and dime him with hidden fees. so he can worry about other things, like what the market is doing and being ready, no matter what happens, which isn't rocket science. it's just common sense, from td ameritrade. another day where you will have one eye on the markets and one eye on capitol hill today. a lot of ceos visiting with the

president of the white house as we try to read tea leaves regarding the fiscal cliff. dow down 89 points. as we await the opening bell in a minute's time, i want to replay something from last night which conagra talked about the mood of the consumer. here's what he told cramer last night on "mad money." >> where do you see the consumer right now? >> it's a very bifurcated economy today with the consumer. you have high end consumers that are still feeling pretty good but in very basic every day needs like food as well as basic services, et cetera, people no matter what economic strata they're in, they are trying to save on those basics. >> explains a lot about where we are. >> took my breath away. what he's saying is there's a huge percentage of people trying

to pay for dinner and dinner is tough to come by and you forget about that on a fiscal cliff discussion that will be even more difficult for people to pay for dinner and he did this acquisition because he knows people are hurting in this country. >> there's the opening bell. s&p at the top of your screen. here's big board at that. prosperity bank shares marking transfer from the nasdaq and over at the nasdaq. >> you're talking about dinner. we are having discussion about whole foods under pressure of late. the company missed. the cfo resigned. never a good thing for a company when you hear a cfo resigning. stock down 18.25%. smaller cap company. it's 2.9 billion. decent actually. but this whole space has been under pressure especially after that article over the weekend

saying that haines growth prospects are wounded. >> material deceleration. 5.6% not good. i think whole foods has done a remarkable job. they had very good numbers. trader joe's doing well. obviously private. this was a major -- this was -- people talked about this as son of whole foods. now it's the red-headed stepchild. >> we have comps out of costco. number one gainer on s&p. joseph a. bank despite good guidance for the year still talking about sandy. >> i thought that the ceo of pbh told an amazing story. a gigantic number of stores were taken out by sandy and yet he still was very confident about the numbers. i will say -- i've been very negative about jcpenney and stocks not doing anything, he

did say pointblank that jcpenney had a really good, really good black friday. >> really? >> i want you to remember, jcpenney is going big using a heritage brand that had plus seven comp number. i have to point it out. i've been negative on jcpenney. what he said was he has seen some acceleration of sales there. i don't know if that means profits. >> how narrow is that in terms of their channels and does it -- as we watch jcpenney shares reversed on your remarks just now. >> knight capital reversed on your remarks. >> my remarks were based on something that was happening. >> that shows you that people watch this show more than -- i think it's emblematic -- i was in jcpenney recently. i bought a really nice hat.

for weather like we had yesterday. a lot of what's happened at jcpenney is to embrace the brands not unlike what macy's has done and i think he's said the jury is out. at least for this discrete period. i thought that was important. it was going through the interview. stop trading. >> it is. it's an important data point. it's part of what is not necessarily a positive one. >> he said it. wow. i thought it was a bust. this was the first guy of some renowned who said there's a pulse. i regard that as being important. a pulse. >> related to shopping sort of? related to cyber-monday certainly. a positive note out today. wells fargo cited it yesterday

saying there was strong shopping and that's a modest positive. any boost to e-commerce could be good for the revenue side. akamai is higher by a percent now. >> akamai is a company that everyone wrote off in the mid '20s and since has been coming back. when i go online now, which has cut into my mall time to be fair, david, the presentations are -- >> tumbles across the board on that news. >> i like to shop for real estate online. it's incredible. >> constantly buying real estate almost every day. >> apartment buildings. >> what do you guys do in your spare time? do you, like, read? >> i won't even start on how many properties this man owns. >> there was a positive article about mexico in the paper emphasizing business.

i was thinking that my mexican properties may have soared in value from being down 80% to being down 79%. >> ten cents on the dollar. that's good. >> i was going to place myself in receivership. >> thank you for putting it in a percentage perspective. my mexican properties are red hot. carl, i'm offering you -- melissa, david, they're so hot that i'm letting you in right now on the ground floor. >> we can take the show there? >> i'll sell properties to you. this is your opportunity, guys. it's not going to last, this opportunity of my mexican properties. >> i'll go to mexico after we go to the mall together. how about that? >> you don't want to go to the other place first. >> let's get to pass bob pisani the floor. >> gold down almost 2%. it's down almost 2%. a lot of comments on beige book at 2:00 today.

normally that's not a source of suspenseful reading necessarily but with comments from mr. evans at chicago fed that we should consider keeping quantitative easing going into 2013 at the same levels and change that and mr. fisher over at the dallas fed saying we ought to put a clear cap on it. it might be a little more interesting reading than we normally have the beige book. that got comments this morning. a lot of talk about costco and now joining the special dividend club. there are lists of cash rich stable companies that may be able to join this special dividend club. here's a couple i've seen bandied about this morning. william sonoma for one. home depot another one i heard bandied around. office max another one and even p petsmart i heard bandied around as special dividend candidate. about the knight capital deal and getco offer of 3.50.

they asked if knight could survive as stand alone company at this point. it's not clear. the board as changed. there are new people on the board that represent various interests. there are people on the board that are maybe likely motivated to sell. who knows. former managing director of general atlantic is on the board. it's complicated. i've asked if other bidders might emerge out there. think about this. only two bidders mentioned are not publicly traded. i don't think that's an accident. not an accident on the big publicly traded companies having come in at this point. a company with a lot of losses. risk out there. litigation risk out there. risk to the company overall. might be difficult to get that through a publicly traded company. i think that's an issue on why you haven't seen different publicly traded companies emerge on this. remember, of course, they have a lot of people out there who are customers who have interest there. those customers want to see their interest protected as

well. finally on retail, good comments overall this morning from american eagle and ann. general express had good comments. that's trading on the upside. here's the good news. consumer is spending. inventories in good shape. holiday promotions as good as last year. not any worse. and of course the cost of goods are lower and two extra holiday shopping seasons. however, i am hearing people say now is the best time for retailers in first quarter comps are more difficult. some say this may be the time to start selling retailers. this often happens this time of year. back to you. >> i want to draw people's attention to jcpenney which was in the red before you spoke, jim. referenced the comments about how they had a really good black friday. it's a move. >> i'm extrapolating. he said they sold a lot of our stuff. >> how can you not be short when

they were down 26% comps. >> we don't know how much they're making. >> any data point that's positive, okay, i'll take my profits. >> at the margin was not something that ceo of pbh said before. he's one piece of the puzzle. we don't know how much money they are making. i said your heritage brand is up 7%. that's really huge. he said jcpenney. jcpenney is behind a lot of that. it took my breath away. as did the knight capital group story you broke this morning. >> we heard bob talk about it. we'll cop back to knight capital. the latest rundown on where we are in terms of the bid or bids for the company. >> as you predicted something good could happen and it happened. rick santelli at the cme group in chicago. >> hi, jim. as we look at pressures look at a two-day chart. you can clearly see we're starting to slip away a bit lower yields. normally associated with anxieties and there's plenty of anxieties to go around.

even though there's plenty of decent news. we may have more of it with a new home sales number that comes out in 20 minutes. if you open the chart up to august, we've been talking about this. if 160 is your pivot, it's doing a good job since we dip below and it seemed like it gained momentum. if you look at the bund we're seeing the same thing. we're seeing it in greek paper. yields are moving down not up. if you look to do buybacks in the greek market, the word is already out. if you look at the chart of the -- i find this a fascinating chart. you can see this moving down. probably putting pressure on our market moving lower. euro currency as well. so to summarize. we all thought silly season was over on november 6th. wrong. it goes on. put these guys in a room and let

them figure it out. maybe find the same hotel over in europe to put everybody in a room with greek and spanish issues in their economy and figure it out because fixed income markets say they're not satisfied on either side of the pond. jim, back to you. >> rick and i are in agreement. they have to go to camp david. get in a hotel room and solve the thing. let's go to sharon epperson at the anaheim nimax. >> in the first minute of trading in the gold, floor trading around 8:20, we saw a $20 drop in the price of gold and many floor traders were talking about the fact that this comes a day after massive put buying. put options, january put options between 1690 and 1700 price purchased yesterday bets that perhaps we'll see prices fall to that level and then those options would expire in december. not much time for them to get there. that lets you know there is a

portion of this market that thinks we could see lower gold prices. this is of course after we have seen a 9% rise in gold so far this year. we also have seen some profit taking but not only in gold, we are seeing this across the board in the commodities complex. we're seeing lower prices in oil as well. we are going to get an inventory report from the department of energy at 10:30. we already saw a report from the industry trade group, american petroleum institute showing builds across the board which may be a reason why we see wti prices under pressure. >> we want to redirect attention to knight capital shares up 19% this morning. let's call it 16%. at 8:20 we told you getco one of the owners of the company when knight had a huge trading glitch and lost all that value for shareholders and had to dilute itself to avoid bankruptcy,

getco one of the investors. now they have made a bid for the company that's complicated. it would involve merging the two companies. and then buying or tendering for half of the company at 1.75 a share. if you're a knight shareholder, you get $1.75 in cash. you have a remaining share that involves getco and night that they value at 1.75. when we merge getco in we have a value of 3.50 a share. it's up to independent directors of knight to decide how to proceed here. as bob said as we've been saying, virtue another company controlled by the private equity firm silver lake is expected to make an all cash offer for knight. not clear where that's going to be. knight's book value around $3.25.

if you assume it's a $3.50 share offer from getco, that's a premium to book. we'll see what virtu does. neither company has currency. it would require silver lake to double down to say we'll double down in this area at in the point. the getco offer includes $950 million in financing. i'm told that is from jeffries which is also a significant owner of knight if you recall having helped put together that deal and invested 125 million in the company. that's why we stand for knight. tom joyce under the getco proposal would be nonexecutive chairman but pushed aside to a certain extent. independent directors will make this decision for knight if they do get that other competing bid. >> has tommy joyce come out and said that he favors any particular? is he trying to get the highest price imaginable? >> the way this process should work is the independent directors of this board are the ones that will have to make this

decision. >> truly independent? >> i believe they are. i believe they are. there's not that many of them. under the getco proposal, a split board. four members from knight and four members from getco with joyce, the chairman. >> i know him from my college class. he's just a good guy. >> everybody says that. >> he came in and saved them from what the s.e.c. was doing to them. >> of course they did have that huge loss. >> they did. >> as we mentioned, ceos are making their way to the white house and capitol hill to discuss the fiscal cliff today. our own eamon javers is talking to one of those ceos. hear what he has to say next. later on, the need for speed and luxury. phil lebeau's live interview wi

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we are just a few hours away from the president's meeting with ceos at the white house today. this is a look at a few of the business leaders expected to attend those discussions on avoiding the fiscal cliff. a number of ceos on capitol hill talking with some republican lawmakers as well. eamon javers is there. what a day. the collision between corporate america and washington. >> reporter: good morning. this place is crawling with ceos this morning. i talked to one ceo as he was walking into the build this morning. he said he hasn't seen a collection of executive firepower in washington like this since the 1980s in the battle over reagan era tax reform. that's how long since we've seen this many ceos gathered up here all working hallways talking to members of both parties, republicans and democrats today. they have broken up into six

different groups. we talked to some of the ceos this morning and they said that the word of the day from their perspective is compromise. >> we are a vast diverse democracy and the only way democracy works is through compromise at the end of the day. i know it no other way. i think compromise means both parties working together. >> reporter: we'll see a photo-op later this morning and then we'll see members of congress meeting with the ceos. then from here on capitol hill they're going to go down pennsylvania avenue and go to the white house later this afternoon where they will do the same thing all over again. we expect to hear the same message over at the white house which is these ceos are representing a business community that very much wants a deal and none of them are talking very particularly about the specifics of that deal. they say they want this deal to get done before the end of the year. >> if only it were that simple. >> reporter: washington is never that easy. >> we know you'll be all over it. we'll see you later on today.

the president is going to speak himself on the fiscal cliff at 11:35 a.m. eastern time. we'll bring you those comments live on "squawk on the street." a former congressman says $16 trillion hints at the true debt in this country. he'll join us later to explain. up next -- >> coming up, are you cautiously maneuvering through this market or have you been hitting the walls? cramer will help direct you with six stocks in 60 seconds. proceed with caution when "squawk on the street" returns. e world... ...you see they all have something very interesting in common. they have teachers... ...with a deeper knowledge of their subjects. as a result, their students achieve at a higher level. let's develop more stars in education. let's invest in our teachers... ...so they can inspire our students.

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tonight. it could be you. >> you'll still come to work tomorrow, simon? >> for sure. >> six stocks in 60 seconds with jim. >> sales were good and some of that is because of jcpenney. i'm not going positive for jcpenney. it's positive for bph. don't go nuts. >> these guys. >> these guys had a great month. it's a double digit month that means approximate will go higher. >> american eagle if you are listening on the radio. >> hertz helped by sandy. >> this is one where every time it gets to this level, people like it. i don't know. >> oppenheimer likes tiffany. >> i think high end is doing pretty well.

>> and credit suisse says rowan is too cheap. >> it's simple. >> how will you shop last night's show tonight? >> it blew me away that conagra said people are playing for dinner. the contrast of what the fiscal cliff really means which is that maybe not that wealthy people -- really poor people don't pay a lot of taxes in this country. middle range people are the people who conagra is talking about. they are looking for bargains for food. >> you are pessimistic that a deal gets done by year end. a sell-off like today and this week is reasonable to you. >> i trust warren buffett so much and that interview today, a deal could happen in january and that's a big change at the margin. >> we'll see you tonight on "mad money." when we come back, we're going to get new home sales numbers

and a lot of people hoping they're good given the fact the dow is down 62 points. back in a minute. wooohooo....hahaahahaha! oh...there you go. wooohooo....hahaahahaha! i'm gonna stand up to her! no you're not. i know. you know ronny folks who save hundreds of dollars switching to geico sure are happy. how happy are they jimmy? happier than a witch in a broom factory. get happy. get geico. fifteen minutes could save you fifteen percent or more.

welcome back to "squawk on the street." we're 12 seconds away from the release of october new home sales. no sector of the economy is more debated than what's going on in the housing industry and most of the recent data has been definitely bottomish if not better. here we go. 368,000. unfortunately that is a disappointment. 390,000 expected. these are of course seasonally adjusted and annualized and the 389 we had last month, which was a 2.5-year high was downgraded to only 369,000. so in the record books it's only going to look like down 1,000 but both the actual number and the revision are a bit disappointing even though the actual number in percentage terms is only down 0.3 of 1%. back to you. >> numbers like castro oil to

the market right now. down 62 and now down 78. >> diana olick, what do you make of it? >> a big disappointment. we got a much bigger drop than expected. that shot the month's supply up to 4.8-month supply. lower than existing home sales month supply. new home sales are based on contracts signed and not closing. this is an indicator of what we'll see in a couple months on the new home sale closings. we did see a big jump in prices of new construction. up 5.7% to just over $237,000. home builders feel more confident about the new orders they're getting in and feel they are able to raise prices a bit. also interesting to note, new construction is much more expensive than existing homes right now. median price of a new home much higher than the median price of an existing home. we have to watch that going into the fiscal cliff and this possibility of getting rid of the mortgage interest deduction or possibly even lowering it. that could have a really big impact on the home builders not

just on ability to get credit to build new homes but potential buyers getting ready to jump into what seems to be a great recovery in the market. if they don't get that deduction, that could have an effect. home builders and realtors have been on capitol hill lobbying quite a bit. month to month figures a lot especially in new construction because it's a very volatile number from the commerce department. that's a disappoint. carl? >> thanks so much. diana olick walking us through the housing data. >> worth pointing out that yesterday durable goods, home prices and consumer confidence were ahead of expectations. data behind the fiscal cliff is not that bad at the moment. just wanted to point that at 11:30 eastern we have an address by president obama to the nation. he's beating business leaders this afternoon. john harwood is in washington ahead of all of those meetings and that address. do we think he'll take a new

initiative here, john? >> reporter: i don't think so. i would expect him to keep trying to put the pressure on congress mostly republicans to some degree democrats because he's getting some resistance among democrats to cuts in entitlement programs but really what you have is a full-court press by executives today. a series of executives going first to capitol hill and later to the white house. lloyd blankfein is probably the best known of those executives. he's been arguing for a solution to this problem. what we have going on is a three-way conversation. one is from politicians to the public. the president's public address and his trip on friday. you have politicians like these executives today asking for air cover. they are trying to have interest groups protect politicians and embolden them to take difficult steps on taxes and on spending and finally the conversation from politicians to each other. that one hasn't gone very far.

we had an initial meeting between the president and congressional leaders of both parties. that was constructive. you have both sides trying to assess their initial bargaining position and we have a month to go but i have to say that i'm hearing somewhat last couple of days more pessimism than i had before. bowles told me he thought there was a one in three chance, only one in three chance that there would be a deal by the end of the year. >> okay. 20 years ago madonna had an international dance hit called "vogue" where people ran around the dance floor and when she said vogue, they poseded f ed dy cameras. is there anything more going on here? >> reporter: there is an effort to build a drum beat of support for difficult things. we had an example before i came on from diana olick.

she was talking about the consequences of getting rid of the mortgage interest deduction. the housing sector, housing industry, very worried about that. people are going to have to give up things of value to get this done. charitable deductions are another. i'm not saying those will specifically be part of the solution. anything that is done to resolve debt and deficit problems is going to cost somebody money and the orchestration of getting a majority support in both houses of congress and with the american people to do what's necessary on taxes and on spending is not easy. a month is not a lot of time. >> john, the white house has just now announced that tomorrow the president is going to have a private lunch in the white house with mitt romney. i'm wondering to what degree does that move the ball forward? >> mitt romney is not as defeated presidential nominees go, he does not have large amount of influence within his own party. we saw it after the election

some of the comments he made. republicans running away from them. he's someone well known from the american people just coming out of a contentious presidential campaign. if he were to put his shoulder to the wheel and assist president obama in trying to move congress along and move some republicans and move democrats as well, that could be a constructive force. i don't know whether that is the end goal of this and whether or not in fact this is simply going to be a private healing session to be followed by some assignment later. if romney chooses to help with this endeavor, he could make some difference. not a huge amount but some. >> thank you for joining us for the latest. new developments on the insider trading investigation surrounding s.a.c. capital. the firm hold be an investor call just a short time ago. kate? >> the headline coming out of this s.a.c. phone call this morning with investors which

lasted about a half an hour was that s.a.c. has been informed by the s.e.c. by a wells notice that it may as a parent company face civil charges in connection with the latest case against former trader mathew martoma and subsidiary of s.a.c. that he worked for. it's a heads-up from s.e.c. enforcement staff that they are recommending that the s.e.c. as an agency file these charges against the firm. that won't be made official until the full s.e.c. commission votes on this and it's not clear how soon that may happen. a wells notice and charges that it often is followed by can be tough for a firm to handle. it's just a negative precedent for companies and has always been in the past. however, s.a.c. said on the phone call today they are confident that even if this is to happen, the material -- there will not be a material financial impact on them and they are well prepared to handle this and

founder of the firm, steve cohen, is personally responsible for this. cohen said he was present at the beginning of the call and turned it over to his president and said we take these matters seriously and i'm confident that i acted appropriately. nonetheless, you guys, this is definitely a difficult chapter for them because you have a situation in which cohen has been implicated in the events with former trader mathew martoma because he partook in discussions but now the firm they founded in 1992 may be charged on a corporate level. >> kate, you know, another firm -- i think this could be in some ways we've seen it almost a death blow. outside investors even just with the wells notice can often times pull their money. as we pointed out many times, $9 billion of what i've told is 15 billion overall in assets at s.a.c. is either mr. cohen or that of his employees.

even if you were to pull out, it remains a huge hedge fund. their investor base is toughened at this point as well. >> those are fair points. there seems to be a growing leeriness among some investors. cohen has a number of high net worth individuals who are invested through fund to funds or perhaps private brokers and i talked to some of those parties who say those investors are getting concerned. they may not have the knowledge are s.a.c. that those in the business fellow money managers and large corporations may have. he has a terrific track record and in recent years the returns have been great. these individuals from what i'm told and i spoke to brokers yesterday who say this feels like a stock that could go to zero amid an s.e.c. investigation. what if money runs out? i do think, david, there are misconceptions out there about the money running out as you point out that's very unlikely. if something happens to cohen to take him out of the action, that could be highly detrimental. >> that would be. >> what have returns been for this past year?

>> through october 31st they are up 10% year-to-date which outperforms the average hedge fund by a significant measure. last year they were up 8% which was the same. much better than the average hedge fund. they have had years in the past primarily in the ''90s but more recently as well with double digit returns and average compounded annual return since that flagship was founded in '92, 30%. >> when is the redemption deadline? i'm curious. i wonder with fiscal cliff talk if the fund has had stellar returns over years, these investors might think lock in those gains now ahead of the fiscal cliff potentially just the way we see that in the stock market with individual issues. some people may want to redeem now seeing there could be troubles on the horizon and they want to lock in those gains that they've seen over the last few years. >> the redemption deadline for s.e.c. investors want to remove money by year end has passed. it was in early november. a week or ten days before the most recent government charges were filed last tuesday. however, investors can redeem in

the first quarter of 2013 and to do so they would need to file their notification by mid february. at least one entity has already done that that i know of. others are seriously considering it. having said all that, i'm not sure how much pulling out of this hedge fund or any hedge fund will help if capital gains taxes are to go up because they will apply to many investments. >> good point. thanks, kate. want to point out the dow down 102. the fifth triple digit loss for the dow so far this month. it's not all that's down. s&p, nasdaq, dollar, oil, gold, all in the red. harry reid, the leader said yesterday that they made little progress on the fiscal cliff, that moved world markets. amazing how one person's comment -- europe is down on that. asia was down on that. you see followthrough now. >> the new home sales disappointing didn't help today. despite weak electric car sales gm beating beak with the first

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>> whatever you think about electric cars, general motors is doubling down on the bet that they will be a winner with the american public. phil lebeau joins us live from

los angeles with the president of gm north america. phil? >> thank you. i want to bring in the head of gm north america here at the los angeles auto show. simon mentioned it right off the top. in a sense you guys are doubling down on the electric vehicle bet with the chevy spark. this move some people are looking at saying is this the right time to be bringing on electric vehicle given the appetite for electric vehicles is not that great in the u.s. right now? >> i think you have to look at it a couple different ways. number one is sustainability piece on fuel and foreign oil. electrification will play a major role in the industry whether it is pure or assist like we have in lacrosse and impala here and malibu. widely different applications depending on budget, fuel economy and efficiency. we'll offer a lot of those different alternatives here. the spark we're excited about because this is really -- we're going to really go hard in

places like california, austin, oregon, where sustainability is part of the real culture and the thread of the way people live. when you look at the spark and you look at what the performance of a car is, we haven't announced the final range because we're not done certifying it but it will be one of the largest range vehicles and torque is more than a ferrari. >> but the skeptic will look at this and say not that you're supposed to comment on the leaf from a competitor standpoint but you look at the leaf and others and people say is there a market for electric vehicles in the u.s.? >> i think we're doing about 3,000 volts here every month. and that's been growing here pretty steadily. i think if you look at the economy and what we've been through over the last few years and affordability of that, it's hard to know exactly what those markets really are going to be when we get equalization here from a growth standpoint in the economy. the bottom line is that we can

save a lot of fuel consumption. we have a place like california and los angeles in an urban environment where spark makes a huge amount of sense. it's a great package. we'll do something here. >> one last question. we were talking about we went on. you have been in this industry for a long time. you can't remember the last time there was this much optimism in the auto industry. is it sustainable? >> obviously everything goes in cycles. we talked a little bit about that. the economy obviously here is something that's variable right now. i think the industry and i think most oems and particularly the supply base that's changed their break even points through this cycle to a place where we haven't been before. the agility of the industry and companies that are in it both supply and oem, that agility enables a huge amount of product investments and if you look at the stands at this show, the competitive products here are --

i have never seen it in the industry. it's very exciting. we can do it and make money. the industry is in a healthy point right now. >> mark joining us when you look around the show here, there's more optimism than you usually see at an auto show. coming up later on, we'll talk with the head of porsche as they unveil a new vehicle here at the los angeles auto show. back to you. >> look forward to that. thank you. will groupon give its ceo a boot? the company will meet to discuss management changes including possibly bringing in a new ceo to replace founder andrew mason. on the cnbc news line is aaron kessler. stock is up 1.25% on the back of the news on a large day on the markets. would this be a good thing if they did this? >> it's to be determined. clearly groupon had growing pains the last couple quarters.

the core business is down 23% compared to last quarter. it appears that core business is maturing and a lot of management changes at the company in the last year and that was on the back of senior management including the ceo. the ceo is responsible for the growth of the company and i think investors given weaker performance this year may be viewed as a positive on the management team. >> have you got the sense from participating in calls and meeting with management that andrew mason isn't plugged in and doesn't know what the right direction for the company is? >> part of the problem is it's an early company. most times at this stage a company is still private and working through these issues as a private company. groupon had to work through these issues as a public company and arguably they were too aggressive early and now they are seeing pain from that. i think it more reflects that they went public too soon as a company and should have waited a

while. >> aaron, it appears at the heart of this is a split between the three founders, two of whom own 23% of the stock and they have now split with mason. can you shed light on the nature of that relationship which seems to be at the heart of what we may witness tomorrow at that board meeting? >> it's hard to comment directly on that. clearly there is a different opinion on the direction the company should take. obviously we are asking to slow down the core business with groupon goods but we'll have to see. it's early at this point to determine the outcome of the management shake-up. >> when marissa mayer was appointed at yahoo! the stock did well. up 27% over the last three months. do you think there's that sort of bang for the buck potentially in this appointment here? >> i think a lot of times you do see a short-term bump in stock as you get management changes

especially companies where stocks went down a lot. short-term that's definitely possible. yahoo! in the past that's happened at a company like that although the stock trails off. that often happens. longer term fundamental costs to be determined in the stock price. >> interesting in terms of what has moved the stock, it was tiger global revealing a 9.9% stake in the company and that's even prior to this talk about possible management change. do you think that gives andrew mason a little bit of time here that a large major investor in early stage companies has given a stamp of approval through 9.9% stake in the company? >> it definitely helps. ultimately performance will dictate what happens. what i would say is during q-4 they did indicate strength in september and q-4. if we do see returns to the business and it really is just more of a seasonal slowdown, q-2 and q-3 could give andrew more time to improve the fundamentals of the business. >> there's a "usa today" report

saying that small businesses are leaving groupon off their list during this holiday shopping season because they aren't getting the payoff. they're not getting return customers. it's not working for them. is there concern that perhaps groupon's customers aren't returning? >> that's been one of our concerns. we've done survey work and it's shown 50% of merchants said they would not do another groupon or daily deal. i think the way the current deals are structured doesn't generate a strong emergence today. works for some but not for others. that's been one of the concerns of investors is the high return rate of merchants. >> we'll leave it there. thanks for your time. >> thank you. >> aaron kessler at raymond james. >> when we come back, life after winning the lottery. tonight someone could win the largest powerball jack period of time in history. $500 million and counting. there was a mega millions worth

656 in march. >> i'll take it. >> still good. we have someone who won more than $100 million herself and she does have some advice for you if you win. still ahead, what stock completely took the shorts by surprise after posting a blowout quarter? we'll give you the name right after this. [ male announcer ] this december, remember --

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dow down just 55. courtney has details. >> some retailers helping the s&p to take a look at shares of american eagle. the company reporting earnings very good. better than expectations. guidance good. same store sales up 10% for the quarter. ceo making comments that it's had a record thanksgiving weekend. that could bode well going into the rest of the holiday season. american eagle not alone. look at several other retailers reporting their earnings today and express reporting better than expected earnings up 11%. melissa? >> what a move.

thanks for that. a blowout quarter for green mountain coffees. herb greenberg joins us now to run through the numbers. >> blowout would be an understatement. green mountain put up earnings and revenues that blew past estimates and not in a small way. you know i had a few buts here. this is a beat the street gain. in that regard here's what i really believe you need to know. the fourth quarter actually came in below what analysts were expecting going into the third quarter when the company was forced to guide down. since this was the fourth quarter, the fiscal year was below guidance originally made back in january. now an analyst who rates green mountain as sell says much of the beat was the result of lower selling expenses but also worth noting, it's interesting. for the first time ever, green mountain used rebates to goose results and that is as it heads into a differ environment.

gross margins were down even though coffee prices were down. bottom line this will play out over the next few months and we'll look at a number of things. we'll look at things like what happens to starbucks which is a partner of theirs right now. there was no mention of starbucks other than when analysts asked the question and what happens to their agreement? interesting story. we'll watch it and talk about it as the day goes on. >> it's a very powerful covering of shorts. that's a big move, herb. >> we assume it's covering of shorts. i'm sure there are people buying. this is the way the market works especially in these kind of names. >> thank you very much. herb greenberg there. next on the program, countdown to the cliff. a member of the budget committee james lankford of oklahoma will join us live on cnbc. is he willing to set aside his pledge to oppose tax increases like other members of his party increasingly appear to be doing. we're back in two. at u.s. trust, our expertise extends well beyond investment advice and research analysis.

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latest reports on the energy department just out. oil supplies we will by 300,000 barrels in the last week down 300,000 barrels. gasoline supplies up by nearly 4 million barrels. much greater than expectations and we are looking at gasoline futures at the low of the session right now trading below $2.70. we're also looking at a decrease in the distillate fuel supply for the week. many analysts expected we could see a build in crude supplies.

down 300,000 barrels. we're looking at crude prices that are off of lows this session but still down more than a dollar. the big story definitely what has happened in the gasoline market as refineries have come back oniline after superstorm sandy. 88.6% capacity. nearly 90% capacity. that's a big change in the energy market over the last week. back to you, carl. >> you might wonder why we're off the lows. we were down more than 100 points. currently the dow down 55. we are getting some flashes out of reuters citing speaker boehner saying he's still optimistic that the republicans and president can reach a deal over the fiscal cliff. not adding anything too specific. saying that once again republicans willing to put revenue on the table if in fact they are met with entitlement cuts. oklahoma congressman jim lankford is the policy chairman and member of the house budget committee and signed the

anti-tax pledge and joins us this morning from washington. congressman, good morning. >> good morning. >> i don't need to tell you. the markets are in a tenuous phase here. a comment from the speaker takes the market up 50 points. where do you think we are? >> that's the frustration with this. in the house we passed our tax policy and sequestration documents in may of this year. we have been waiting on the senate. the senate said we'll see you after the election. we hoped this would have been settled a very long time ago. >> we are beginning to see senators at least bepd on long standing pledges that they signed with grover norquist. people skeptical about a deal say what really matters is the house. the house is not showing that same level of flexibility, call it whatever you want. is that fair? are republicans in the house -- you're from oklahoma. obviously a red state. are you as resolute as you have always been? >> i am.

here's the issue. the tax rate has never been the solution. there's a couple things to keep in mind here. one is obama care taxes kick in january 1st. there are three aspects to that fiscal cliff. the third aspect is the obama care taxes that are coming. there's a 3.8% increase on capital gains, on dividends, interest income for people making 200,000 or more. that's already coming. that's baked in the cake. what the president wants is an additional tax increase rate increase on the same group of people he's already put a rate increase on in january. we're pushing back saying they are taking a hit in january based on the obama care taxes. why talk about a double tax rate increase? second thing to remember in 2007 we spent a trillion dollars less than we spent this year. the revenue is almost identical. 2007 to this year. the issue is not can we raise more taxes. the issue is we increased spending a trillion dollars and our simple push is to say why don't we look at spending? that's the major issue. we can't keep raising taxes and saying we'll just keep raising

taxes as long as we raise spending. we're overspending. everyone is looking at congressional republicans saying what are you going to do on tax? no one is looking at democrats saying what will we do on spending? >> congressman, are you able to help us understand what is going on behind the scenes at the moment physically? oil markets moved yesterday when harry reid said he was disappointed with the progress being made. we assume not a lot was happening. now on one of the reasons why we jumped 50 points on the dow, we cut our losses by 50 points on the dow is because senator hatch is suggesting that the democrats and gop may be only $23 billion apart in some sort of deal. are we actually at that granular detail of discussion behind the scenes? >> no. i don't think we are at that level of discussion. a lot of it is still preliminary. there is great optimism. just left a meeting with the speaker. the speaker reiterated again we

feel like we can get a deal. this is not something that's brand new to us. this started last june that we tried to work on for a year and a half now. and then as i said, the house already passed documents we needed in april and may of this year. we are waiting on the senate to say what is your response and how are we going to deal with this? pressure is being applied and the focus of sequestration was to make congress do its work. this is making congress do its work. >> that's reassuring. mitt romney is going to have lunch with the president tomorrow. does that weigh on you at all? does that move the ball? >> no. that really doesn't affect us one way or the other on it. it's a good gesture to have but that doesn't affect where we are in the hound we are in the senate. >> it has been suggested that maybe the white house is building what one person called a team of rivals. >> that would be great to see. we need a team of solutions at the end of the day on this one. we've got lots of rival voices out there. we don't have a lot of solutions

coming out. >> congressman, before the president meets business leaders this afternoon at 4:45 eastern, speaker boehner will meet those business leaders, is there any point to those meetings? do they achieve anything? is there added value from this or is this just face time? >> a lot of it is just face time. a lot of folks we visited with on the phone and have comments back and forth and know what's coming out of the meeting. there will be meetings with small business owners tomorrow as well. focus on what are key areas and what we continue to hear from these folks are we have to solve the deficit crisis and debt crisis that has to be settled and no one thinks that can be done with just tax increases even with what the president put on the table, this 86 billi$86 in increased taxes on top of obama care increases next year doesn't get us a tenth of the way there. no one is talking about the other $900 billion. that's what we need to focus in on is how will that get solved. they need to encourage the president to say we have to deal

with the spending. we cannot just accomplish this with taxes. >> as you've been speaking, the dow erased almost all of its losses. we did good work today. dow down 20 points. thank you for your time. jim lankford from oklahoma. the president will speak on the fiscal cliff at 11:30 a.m. eastern time. we'll get you those comments live coming up in the next hour. >> the powerball jackpot is at an historical $500 million and climbing. tonight's draw at 11:00 p.m. eastern. cynthia stanford won the california lottery on mother's day in 2007. she was also featured in the tlv show "the lottery changed my life." good morning. how do you feel when you see figures ramp up and you know there's another big lottery winner in the offing?

do you remember what it was like for you? >> i definitely do. i remember it like yesterday. it is an exhilarating feeling. definitely. >> of course people want to know what your advice would be to whoever may win tonight. what is the primary thing you would say to them? >> primary thing i would say is to definitely breathe and take your time making financial decisions. don't rush into anything. just take your time to experience what's happening because your life is definitely going to change. >> what about the celebrity? obviously the organizers of the lottery love to photograph everybody there with big checks. how addictive does that sudden celebrity become? you actually set yourself up as a torture host. you used the money to have your own show. >> well, i have a production

company. i'm looking to do a show. but i do have a production company. i think that winning the lottery can open a person up to numerous opportunities yet again take your time and just enjoy it. enjoy what you've been given is my advice. >> i have to ask you. when you see a big payout like $500 million and you already have beat the odds, are you also playing? when you see that? are you inclined to go buy a ticket yourself knowing that you've done it once and maybe you can do it two times? >> well, california does not participate in the powerball but if you're close enough to the arizona border, i would suggest the person go and grab a ticket. yeah, definitely. definitely. i mean, all it takes -- i think the powerball is a $2 ticket. if you have $2 in your pocket, go and get it. >> just the one? the odds of winning are 175

million to 1. >> yes. >> how many tickets do you think i should buy? >> one. >> okay. >> is that how many you bought when you won in 2007. >> yes. it takes a strong belief. you have to believe that you're going to be the one to receive it. >> visualization. it's great to meet you. we wish whoever wins today and everybody luck. thank you very much. >> thank you for having me. >> it's a pleasure. >> it's funny. she was in the lottery changed my life and other shows, curse of the lottery. >> definitely a curse. >> people win the lottery and they end up dead years later. >> or broke. >> or both. all right. what is being said about nancy pelosi's handling of the fiscal cliff.

controversy surrounding hp and how much damage is being done and why hp should split its business into two. ♪ ♪ [ male announcer ] 'tis the season to discover the kid in all of us. the memories that last, start with the gifts that last. ♪ enjoy free shipping and great values on your holiday shopping from l.l.bean. to a world of super-connected intelligence. the potential of freescale unlocked. nyse euronext. unlocking the world's potential. to investing with knowledge.

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see your doctor, and for a 30-day free trial, go to axiron.com. lloyd blankfein is in washington today just hours before his meeting with the president on the fiscal cliff. eamon javers is on the hill where he just spoke with blankfein. >> blankfein just walked into the capitol building a few minutes ago and had a chance to catch up with him on the walk in front of the capitol building. he put this effort by ceos today in washington at the capitol and at the white house in sort of historic context talking a little bit about how the nation's business community responded after world war ii and he also said that he thinks it's important that there be everything on the table including entitlement cuts and tax increases for a final deal. listen to what blankfein had to say a minute ago. >> we don't legislate but we know a lot about what consequences are of the failure to reach an agreement and we know about what the opportunities are if we do.

so i think the legislators are appropriately requesting our point of view because we have a point of view and we have this experience and it's our duty to give that. >> blankfein and other ceos will make rounds of capitol hill this morning and then later today they'll go down and meet with president obama down at the white house and obviously we'll try to talk to as many of them as we can throughout this day, carl. >> all right. thank you for that. eamon javers in washington. a war of words is escalating between hewlett packard and autonomy founder mike lynch. lynch challenged the allegations brought by meg whitman over autonomy's accounting issues or irregulari irregularities. there was an op-ed saying in order to save hp, the company needs to be split in two. we asked meg whitman the same question last week when she appeared on our show. listen to what she had to say.

>> we had a growth part of this company and a part that's slower growth that we're managing for cash. that's okay. you have to be smart about how manage hp's portfolio of assets. we have great products coming up that i think will eventually turn the revenue trajectory at the company as a whole. >> bill george, you know, meg says, listen, i manage a smaller growth business that will help faster growth assets. they belong together. why do you disagree? >> these are totally different systems. i think they need to spin-off and get very low overhead on the computer hardware business, printers and pcs and servers and all of the commodity hardware and their competitors are running around 4% overhead. they need to get down to that level and take off what i estimate around $1 billion of infrastructure cost and then get the enterprise system business

competitive. autonomy was an attempt to do that. i think it only got them partway there. they have a long way to go to compete with ibm on the enterprise system side. they are very separate businesses. i think that both will be about $260 billion businesses. both fortune 50 companies. you'll see much better performance. this company has been sliding for 13 years through four ceos. they keep cutting back r & d. it used to be 10%. they have cut it down below 2.5%. you can't compete on that level in a high tech business. the only solution i can see is to break it up and to have a dramatic change. let meg run the enterprise system and let bradley run the computer hardware side of it. >> that opinion of course is one that has been shared in the past by others including perhaps some members of hewlett packard's former board. let's not forget during that

terrible short reign they were going to split the company. meg came in. studied that decision. reversed it because she believes that there is a lot to be gained. synergy between selling what is the same set of customers to a certain extent for all of those different services. why isn't that something that should be considered here as perhaps a positive and why a reason to keep them together? >> when she saved was a pc business. i never heard a proposal to spin-off printers and everything else. >> i stand corrected. you're right. it was pcs. >> i don't see synergies. no one has named any. it's a mythical idea. if they want to source their computer hardware from their former company they can do that. they can have a contractual arrangement. that's easy. ibm spun off its pc business and disk drives where they were number one and they sold off the

disk drive business. there's no reason they have to have this. the problem is it's a huge distraction. they have to get focused and bring old hewlett packard back. there's no strategy to this los whole culture. there's no mission. they've lost a sense of the value. and the employees are confused. four times they've got outside. why would i want to work there if i have no shot at the top. >> so where does that start then? you know, you're obviously a longtime board member of a number of important companies. this board we can certainly start in terms of blame there, but does the change, does the conversation need to come from the board if in fact that is going to occur? >> absolutely. this board is a revolving door. they've had four or five different boards in these 13 years. most of the people are new. there's no institutional memory. the board i serve on, there's a long, institutional memory.

that's very important and they have lost that. i think the board needs to face reality. they panicked into autonomy probably paid double what they should have paid for it. the software idea was a good one. it wasn't a bad idea. they desperately need that to compete. but oracle and s.a.p., but it hadn't been well managed. but same with e.d.s., now you have written off on two acquisitququququququququ ds tha? they're overreoaking in hiring ceos. >> one last question, bill, you have not called for meg's head even though she was on the board at the time, even though she feels bad about approving the initial purchase. why shouldn't shall go? because the company can't handle any change? >> no, i don't think that's why. let's give meg a command. i'm not blaming her. she's cleaning up messes created by her three predecessors. let's let her do that in the areas she's an expert in, which

is software and systems. she's not an expert in that computer hardware. todd bradley is. she was on the board, but i can tell you there's a big difference between the boards and ceos proposing these things. these have not been well thought out. there's no solid thoughtfulness and due diligence going on that should be going on at the board. it's $125 billion company. frankly it's gotten too big to manage. that's why i think we'll be better off with two companies and finally the shareholders could get a chance -- >> it's an ugly story. you know, final question, bill. she talks about a three to five-year turnaround. you're giving voice to any number of investors will start to adopt. do you think she makes it through the turnaround in terms of keeping the company together? >> i'm not optimistic. there's just going to be -- i'm not piling on.

i'm saying let's take the bold action and get the company healthy. let's split it and we can have two healthy companies. >> bill george, thank you for being here. >> thank you for having me. we were down, you were saying 112 points at some point. just these comments that came through from boehner, the sensitivity to negotiations on the fiscal cliff blow by blow, moving the market in real time here. >> there's more analysis of the new home sales that we got, the numbers do including the effects of superstorm sandy, therefore that's why they may have come in lower than expected. they're looking at them more carefully and maybe coming away with a thought that perhaps they were depressed because of the storm. meantime, need to speed and luxury. we have a live interview with the ceo of the porsche, unveiling its newist ride back from the auto show.

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nothing can reverse copd. spiriva helps me breathe better. (blowing sound) ask your dr about spiriva. sdpli okay. marx about seven points from the flatline. homeowners continue to drag in the red. that was a disappointment. this morning, even though as you said, melissa, some additional

digs shows it did cover the whole month. we know what happened. >> superstorm sandy hit the northeast, and it had an impact. apple was down 1.5%, but it did repair some of the losses. apple still down by about 1.3%. >> on the home builders they've had a phenomenal run, some of them have doubled. it's extraordinary the gains you've had. we have barbara corcoran of the corcoran group, to talk about whether or not there is maybe a crack in the housing pictures and also henry blodgett, remember the -- he'll be speaking with andrew macing at groupen, so he'll have the lowdown. >> everybody wants to know whether his first question will be about mason's tenure. guys, see you a bit later. here's what you might have missed if you're just tuning in. welcome to hour 3 of "squawk

on the street." here's what's happening so far. >> we need a market credibility $4 try wrong plan that comprises both tax increases and significant entitlement reform. >> we run a deficit every year, but because the economy grows, 18 1/2 and 21 is a have sustainable figure. >> when you meet with business leaders. they're going to have to lay off people. why is -- has that played any role at all? now they're just trying to figure out, i don't know, what's the word going to look like? >> it's a threat through all those -- and fuel economy and

efficiency, so we're going to offer a lot of those different alternatives. >> we're overspending, and i'm a little astounded. everything -- no one seems to be looking at the democrats say what are you going to do on spending? >> we're checking our lists as the "squawk on the street" countdown to christmas continues. ♪ you better watch out ♪ you better not cry ♪ he's making a list ♪ he's checking it twice ♪ welcome to post 9. what a ride we've had even if the first couple hours here. now we're down large three. it's time for the about the spending problem that our country has. i'm optimistic that we can continue to work together to

avert this crisis, sooner rather than later. meantime costco cup best top performers today, yes, a special dividend. the president is expected to reach in about a half hour, we'll bring it to you live when it happens. plus bill archer explains why the $16 trillion deficit is actually only a fraction of the reality. is everyone looking at the fiscal cliff all wrong. all that is coming up, but we'll start with the cliff. president obama will meet with ceos from all aspects of business this afternoon.

our tyler mathisen is live on capitol hill with more. good morning. >> carl, it's been a very busy morning here on the hill sounding a bit optimistic. that was before he went down to his chambers to meet with the business leaders from, as you say, facets nancy pelosi was meeting with business leaders as well. she sounded a rather optimistic tone about the likelihood that both sides can fashion some sort of deal, but these are snowcones out there. there are still rocks in some of those snowcones. the majority leader in the house mr. cantore sounded a somewhat more aggressive tone moments

ago. let's listen. >> we have not seen any good faith effort to talk about the real problem that we're trying to fix. i'm told that mr. bowles, as some of us will meet with him later today, said earlier this morning there's been no significant decision by the white house on entitlements. >> mr. bowles, of course erskine bowles who look with maya mcginnis along with the group that's descended on capitol hill, some 60 strong. they began arriving about 8:15 or so for a coffee and breakfast, executives coming in for a meeting in the visitors center on capitol hill before they broke up, fanned out for meetings on both sides, the senate and the house, republican and democrat. one of the leaders who was here, lloyd blankfein, another from banging, james lee, the

right-hand man of jamie dimon. and here's what he had to say. >> we're here putting america back to work, big companies, small companies. that's why we are here, nonpart sans, no politics. >> nonpart sans, no politics, lee may be a hell of a deal maker, but he may not understand that this today is all about politics, high political theater. the white house will be having some comments westbound the next half hour or so. there's a 1:45 press conference here on the hill from deriving from the fix the debt group and later today the executives will be meeting down at the white house with the president, some from the group that's been here and they'll be joined by other executives later today and we'll have coverage all day long. >> it would be a lot more interesting this afternoon. thank you, tyler.

the debt more than $16 trillion, but an op-ed in yesterday's "wall street journal" suggests the number is a lot bigger and presents a greater challenge than the fiscal cliff. bill archer joins us this morning from washington. good morning. good to have you. >> thank you, carl. i'm glad to be here. how are we reading the cliff. >> if they had a balance sheet the way the private sector prepares it, it would show an 86 trillion additional burden of debt that's coming because of the commitments that have been made on the entitlement programs. that doesn't show up.

in order to sustain that to be able to sustain that on a present-day value basis. there isn't enough in the way of taxes to provide that. you tax 100port of corporate earnings you get 1.6 try wrong. you tax -- you would get about $5 trillion. that still is not enough so all of this talk about who we're going to tax really begs the point. the real problem is in the commitments for spending, and they have to be reformed, or this things is going to get completely out of control and be unsustainable. >> so congressman, does this --

did lifting eligibility ages get us there, it means testing, changes in c.o.l.a.s, how much can get you into the ballpark? >> all of those things would be helpful. they would all have to be projected out and computed by the legitimate estimators. i can't tell you precisely what it's going to take, but it's going to take things that will be unpleasant, sacrifices on the part of the american people that they really don't want to make. your comment that pool 'tis drives this is so accurate. my experience as chairman was the single biggest driving force behind what we did in taxes is politics, not what is good policy. we've got to understand that, and we've got to see that the american people fully understand the magnitude of what's coming ahead for us. we're doing our best a that front. as head of ways and means, you

nude better probably than most about how trains run and whether they run on time or not. with 32 days to go is there any way we get a blueprint by the end of the year? >> i think yes. i think there can certainly be a blueprint. ultimately a part of the answer to this is fundamental complete tax reform. that is what is being pushed primarily by the republicans and supported by a few democrats. that needs to be ultimately a part of it. that's not going to happen with now and the end of the year, but a plan can be put in place to where it can happen next year. the current chairman of the ways and means has said he is going to make it happen in the year 2013. that will give us a completely difficult picture of what will happens on the tax side. if we don't start making reforms on the entitlements now, it will

become exceedingly more different every year that goes by. we're talking about mass numbers that dwarf what we're talking about on the fiscal cliff. >> that 86 will definitely get your attention. >> mr. chairman, thank you for your time. it's a pleasure talking to you. >> you bet. one special grocer guess whacked today. >> we want to draw or viewers' attention to fresh market, a special grocer. shares down 15 march. the company report fiscal third quarter earnings beloaned expectation, also announcing the ceo has left the company. this is an interesting caveat. remember we got that deal where we had conagra buying rail corp, so this is interesting. it's a special grocer. perhaps this tells us a bit about the consumer not buying as much specialty, moving more to private label.

>> sort of reminiscent of what the head of conagra told cramer last night on "mad money." good morning, rick. >> good morning, carl. we talked about how the public was getting tagged again, big on the hook as the guarantor of various ways to guaranty teeth monies from the government for private corporations and municipalities. today extra-credit project. anybody who has students out there understanding sometimes when your grade isn't cutting the mustard, the teacher says extra credit. but i'm not talking about that. i'm talking about articles article talking about how student loans, student credit is

now at a sdling wane rate. let's show the chart it surpassed cried cart debt. it's 11%, crowding out all others, who is on the hook? once again just like yesterday, you are. you are on the hook. this like health care was taken over by the government. i'm sure it's a lot easier when all the chips are on one board to ease some of these issues for students. once again you don't get to eat the meal, but may enup getting the bill. used to be called four on the floor lebeau, a lot of gm talk, a lot of talk about the volt. when i was young, there was a great car, there were lines. you wanted to get a gto? it took monthsing to it, or the new camaros, where is the line for a volt? there is no line, and if it wasn't 500 million shares of

public money in there, i don't think they would be making it. think about that. now, let's come up with a new segment, music to trade by. what's song number one? let's play it ♪ on the road again >> i like that. "on the road again." something ought to tell the president that the campaign is over, seriously. you foe what? you caught some flies with honey, but it seems like the fly swatter seems to be the tool most widely used, bringing all these businesses to the white house, the election is over. lloyd blankfein, one vote. warren buffett, one vote. the voice are tallied. last but not lease, one final son. what is it? ♪ what goes up ♪ must come down >> just look at any chart of any commodity, because the way i see the fiscal cliff, they're all going to go the we of gold to try to beat the tax man. back to you.

>> i like this wolfman rick thing ute going. we'll see you in a few minutes. it was an entire economy left for dead. now some people are seeing signs of life. why japan could be the next big investing opportunity. later on the president will speak at the white house about the fiscal cliff and the pocket effect on taxpayers. a lot more "squawk on the street."

with the dow now positive,

gary you're back, you're here, you have your powerball tickets. these are the winning tickets, folks. you're talking japan. >> i want to remind you. sdploot let's listen to what he had to say back then. now, when we finished that interview, when we walked offset, so many people were saying, man, this guy is so right. in fake, the japanese market had

a great move since then. if you're an alpha generator, obviously you've got a lot of concern, a lot of things every day, you have to find ways to do it. you know the inflation talk was raised there. as a result, you have massive strategic portfolio decisions being made as follows. you don't have to worry about what's happening, and ways that people are playing it as follows. there's also the wisdom tree japan etf, and if you look rat what's happening -- there it is. if you look at what's happening in japan again it's about trying to figure ways to participate and make money, this is a major trade, there are a number of people that continue to press

this very hard. i mean, we think we've got some volatility on politics here. that's real questions to be answers. when we come back. taking the wraps off porsche's new ride. before the break, though, a check on the markets. the dow positive up 26, 28 points. back in a minute.

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taking a look at the dow intraday. if these gains hold, i'm told be robert hum, our statistician, it would be the second time this year the dow hased out a 100-point intraday range, loss. we'll see what happens. rick santelli in chicago. over to you. >> thank you very much. our guest today is jeff carter. you know, we all have been talking about the fiscal cliff

at great length. >> yes. >> but there's another clib in your opinion, the health care cliff. tell me about it. >> i think the taxes that will come with that haven't been incorporated into everybody's mind meld, but more importantly right now the governorers are talking about should they let the federal government set up the exchanges. et way they do it, it would be sort of a failure. we're standing on the floor of an exchange right now, we know how it works. >> what are the weaknesses with the way you perceive it to be set up. >> i think they have subsidies and price ceilings. >> so like an exchange in the old communitiest russia? sort of like that, exactly. exactly. what i think will happen is there will be a secondary market where people will go for goods and services. the merck, board of trade, i.c.e., there's a lot of technology behind it.

it's not just the price on the board. there's clearing in settlement, delivery, all the things that go with back office processing that people forget about. that's ongoing fixed costs that's very expensive. i think the -- cme, one of the top technological companies in the united states. it seems like a massive undertaking, so legislations pass, but none of the detail is worked out. you know, when it comes to the fiscal cliff. many have said you can take an envelope, and we need to extend the age, maybe tax issues, these are easy. but what we're talking about to set up would be on the back of the sears tower. it's monstrous. the government isn't good at

this. >> the government isn't good at it. but we know the way we were doing it was bad, right? >> absolutely agreed. >> they're focusing there on costs. that's why costs continue to go up, but they to said the price rather than set the price a let the individuals run around the price. >> justice stephens made this issue go away in many people's minds, but what you're talking about reminds me of an article. there would be a huge amounts of modifications that will occur, are they not? i want there's so many blanks out there. the core thing they need to come to is talk about the markets like we have here. individuals interact, independently to derive a price. >> sounds like the ben bernanke interest rate model. carl, back to you. tangs a lot. there's a few more moments

leave in the european trading day, and then don't forget. the president will speak on the fiscal cliff in about nine minutes if he's on tine. we'll be right back. at u.s. trust, our expertise extends well beyond investment advice and research analysis. it includes proprietary offerings like our eldercare program, which helps provide for those who came before you. and our financial empowerment program, which helps prepare those who come next. resources like these have made us the number-one trust company. that's why generations of families have come to us to help build their own legacies.

about 20 seconds until europe closes.

there have been some encouraging signs regarding spanish debt, italian debt, but simon will tell us whether that's transferred to equities. >> the fiscal cliff is primarily what people are focused on. >> the european markets are closing now. >> when i came into work this morning most of the markets wore down. they have cut their losses and moved into positive terr toys as indeed has the dow as a result of the comments from boehner, so the fiscal cliff is center stage, but there's in wildcard, a real wildcard out there. that of course is the fact that the greeks in for weeks have to buy back their debt on the open market and cancel it with loans from the rest of europe. that is a precondition to getting that money that was agreed on month night. there's a big concern to whether they can achieve that. today the finance minister of greece held a news conference to talk up that trade. they royaltied deutsche bank and we learned they will be in

charge of it the next couple weeks. this guy said they hot this was a bargain, but the fear for many in the martial is they will be strong-armed, and again you see the way in which -- the greek banks are down over 50%. so you see national bank of greece down 7%, that's the big one, but the others continue to fall. the minister said there wouldn't be a need for further recapitalization, but clearly at this sort of level, that is always a concern. now, this is also a time in which american hedge funnels can cash out po tefrlgally on massive products, on the distressed greek bonds. this is the yield, moving in the upward direction. look at how the yields have coup down, the prices have risen.

the issue is whether people will be able to set out at the moment and mac the profits. let me tell you currently they trade at 28 to 35 cents on the dollar. dow jones is saying when they price it on monday it could be 28 to 37. so some people may just walk away, in which case how can you get the purchase downs and unlock the money from the rest of europe. that is what we will be discussion the next two weeks. the other important development is in the span irk sectors. on the one hand they said the bailout can go ahead and that potential unlocks 40 billion euros meantime individual banks are coming through with their plans. its stock is up 9% today. it's announced the rights issue. as a result of that, the current shareholders will have about 20% of the capital. they seem to have responded

relatively well, at 9%, but you've lost 94% of the shareholders equity over the last five years. the bigger issues here. this makes span yariards very a. they ended up holding debt, and they'll be swapped out into shares. they'll be taking a lot. bankia will also sell off about 50 billion euros, you know how europe is a tangled web of ownership. you might not know the names, in certain parts of america, map free is a big insurer, they'll sell that out. ica they owned iberia, and it was swapped into that. they also will sell into that. so there's a huge amount going on. watch this debt buyback, carl, over the next couple weeks, can

this el succeed? or has he convinced the recent of europe they have done enough. thanks, simon. meantime protests continuing in egyp as demonstrators demand that the president morsi rescind -- announcing they're going to go on strike halting work until the decree is revoked. we're live in cairo with the later. high, ayman. >> hi, carl. the people are still demanding that the president morsi rescind his decree. also added to the list of growing demands, they want to see egypt's body that'sing tasked with writing a new constitution be mea reflect erv of egypt's diversity, and that it's not a that it doesn't reflect only the islamic party's

perspecti perspective. there's some calls by the protesters to dissolved the current body and mike sure the new body is more diverse. other issues are lingers from the revolutionary days. president morsist says he has to takes the action action becausitis egypt's judiciary that's stalling the it's shaping out -- caught in the midding are supporters every both sides, the liberal and secular state say it's on the wrong side, but the president and supporters say he has the pourer, authority and justification to take these measures. as we look at some of the

pictures ayman, thank you. we're being blown around by some headlines here. we've had great numbers on housing. here's what happened, right about here. came out below expectations. this is some of the negative data points. i was a little surprised by it. the market was, too. then we want representative boehner come out saying he was optimistic. so we're getting blown around by the headlines. downbeat september and october new home sales numbers. let's talk about retail. things are looking good in retail land.

american eagle, all had generally positive comments this morning is consumers continues to spend, home prices are rising. holiday promotions have not been expensive, the cost of goods are lower than last year. the holiday season has two extra days. we had great numbers last year. the comps, and they're not going to be a good this year, and very little short interest. remember, a lot of these retail stocks are very close to new highs. i just want to comment on knight capital here. we've got several things. we do have report -- confirmation $3.50 cents a share

cash offer and there are reports that there's an offer of $3 or above per share. i'll explain why they're interested in this at all. it's very simple. gek getco, and virtu have bigger, badr al goes than anybody. they're looking for expand and leverage those programs, the algos that they have. knight has the wholesale business they're interested in. it's simple. a technology leader with a large customer base and an industry leader out there. that's the interest. the irony about this jeffries provided the financing to help knight in its hower of need, and now getco is uses jeffries as a source of financing which would appear to push aside -- i'm sure

there are some people over there not particularly pleased about the strange roles -- >> compliments of a bunch of events once you bring jeffries into the fold. fascinating, bob, thanks so much. speaking of retail, carl. >> watching this every day. last night on "mad money," he made some comments that he's please with the way his merchandise is being displayed. that's the main reason we're seeing shares move upwards today. it was an interesting comment from a guy that of course we listen very closely too. yeah, it was dramatic, too action right at the top of the show. mean nim gary is here, i love this story. amazon going back to the credit marx. >> first time in 15 years. they did 3, 5 and 10-year bonds

you know what's happens, and we've talked about it adgnawsium. but this is what the most amazing thing to me is. i plan to come here today and tell you which of the type of institutions bought this bond. $3 billion deal. i have the greatest sources, as you know in the bond market t i spoke to some of the corporate bond managers. carl, this is the most amazing thing. nobody would admit to buying these bonds. i specifically wanted to know about the ten-year bonds. they are basically almost a full percentage poem over. obviously amazon is not the same company it was a few years ago, but were people so embarrassed they would be paying for going to a credit like this and essentially getting these types of yields that no corporate bond manager wanted to admit -- as

david, i could not find anything who said they bought these bonds. i guess it just means you're going to continue to see many more of these deals. costco did a deal today. they're going to keep coming thanks to ben bernanke. >> but it's -- bottom line, it's a above they are ebl to do this. they bond managers have to put it to work. >> it says something about the money that's going into bonds that nobody wanted to admit to me that they participated to buy that kind of credit, that type of ten-year yield to maturity. >> that's incredible. only you could have brought us that. thanks, gary. porsche is revealing its new

ride. plus what yahoo ceo marisa meyers had to say. the president is scheduled to speaking at 11:35, it's not 11:41. as soon as we comes to the podium, we'll take it to you live. 6 good.

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. the man who many thought would be ceo, ross levin sen tells us what he thinks of the new strategy. j.c. penney, love it or leave it. carl, we'll see you at the top in about 15. >> if the president is late, you might get him, too. we want to go to california where phil lebeau is at the l.a. auto show with a special guest. good morning. >> this is when it's fun to be at an auto show. a lot of people are wondering what's back here. laid yes, sir, the first sneak peek worldwide of the any porsche, just the front part. >> we very produce to have the worldwide debut of the all-any

cayman. it's a brand-new car we have a new designs interior and exterior, but still the classy look we've become so used to. >> like the porsche 911, this is typical element of the porsche democratic na, so we are looking forward to a lot of success with the car. >> this will start in about $52,600. is the discussion about higher tax rates, will that impact the sales for porsche here in the united states at all? >> i hope no. it's a strong brand and we have very attractive product -- we are looking forward to having no problems in the united states and all over the world. >> you brought up a good point. the people buying this if their tax rates go up, they're still

going to buy a porsche, correct? >> i'm convinced they will do. >> so when you look at the u.s. market, it has been strong, but not overly strong. what's the change in the next year, do you see that continuing? >> as opposed to the premium, like porsche, we'll have success, and there will be a discussion about this, what you mentioned before, from my point of view, most of the volume will get but not the -- >> mathias muller, a worldwide debut, there it is, the new porsche cayman, sees it first here on cnbc. >> i'm getting e-mails from people who have a cayman who say they should have waited, it's absolutely gorgeous. thank you, phil. marisa meyers speaking out publicly for the first time. what did she have to say about the silicon valley internet

giant. and we're expecting the president to speak at any moment. let's hope it doesn't come during the commercial break. back in a second. [ male announcer ] 'tis the season to discover the kid in all of us. enjoy free shipping and great values on your holiday shopping from l.l. bean.

groupon making -- the company is due to meet this week

to discuss management changes including possibly bringing in a new ceo. our julia boorstin is live with more. >> good morning, carl. andrew mason will take the stage at the ignition conference in just a few minutes, then this afternoon he'll head to a groupon board meeting scheduled for some time now. groupon's stock is moving higher on the reports that the board is discussing bringing in a new more experienced ceo as it tries to expand beyond daily degrees. these reports are no surprise, and it's not the first time that this is a company that has struggled with accounting issues plus the fact that two high-profile board members stepped down in april. mason has had the sbort of --

the three have controlled 55% of voting shares. now, keybell and lecoughs can i wouldn't comment, but if they are frustrated then the two could push mason out, but if they remain as loyal to mason as they have been, then any change in management would only come with mason's seal of approval. so we'll be monitoring to see what he says starting in just a couple minutes. >> there may be no more closely watched succession story than that one. thank you, julia. speaking of succession, marisa meyers is speaking out publicly for the first time since taking charge of that company. jon fortt has more. >> no bombshells from mayer last

night, but she did talk about what yahoo will and won't do and her only personality priorities. patty sellers noted that yahoo shares are up, and emphasized mobile as an area where the company needs to gain ground. listen. >> i think that one of the really important things for yahoo strategy moving forward is mobile. we have a terrific set of assets on the web. they were all the things that people want to do on their mobile phones. >> reporter: the trouble here, is that yahoo has been getting locked out of the mobile app. space. mail is one of the yahoo's most important web franchises, but that doesn't translate on smartphones. so in properties like sports, yahoo does supply data to apple's siri, for example in cat groirs like sports and finance,

it ravens eight and 16th, but that said, yahoo is not going to try to do -- bun thing she had she won't touch is maps. i've done maps in my former life. it's very expensive, very hard to do well. apple is finding that out. so we're not going to do maps, right? >> she also quoted vince lombardi talking about her priorities. she said her priorities are god, family and yahoo, which is what an investor would want to here. >> a funny comment on apple. jon fortt in san jose, thanks. bob pisani has more on the virtual bid. >> we were talking about this earlier. cnbc can confirm that bidding at least $3 a share in cash for knight capital. we're talking about all of it, not just a part of it.

getco earl -- that's a more complicated deal. it's cash and stock, so these two deals are not exactly comparable. a difference between the deals is the leadership. under the virtu bids would be one of -- unit the getco deal, he would not be ceo, so managerial interests in the outcome of this bidding as well. when kell bum back, find out how the oracle of omaha would get the u.s. fiscal house in order. we're back after a break. and we can save you 10% on ground shipping over the ups store.

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okay. here's a live shot of the white house. we are still expecting president obama to speak in about two minutes' time. even the oracle of omaha is watching washington. warren buffett outlining the plan he thinks could get the fiscal house in order. take a listen. >> the plan would get us in the near future to having 18.5% of gdp as retches and 21% as expenses. we've had that plan basicly in effect since world war ii. it's bounced around a bit, but

those two levels, 18.5 and 21 are sustainable, in the sense that they will not increase the ratio of the national debt to gdp. they'll run a deficit every year, but because our economy grows 18.5 and 21 is a very sustainable figure, in fact will probably bring down the debt to gdp over time. >> carol loomis next to him have been on a immediate use tour with their new book, that we're held to the fire, got a very good interview. costco still remains one of the top gainers as they jump on top this special dividend bandwagon, stocks up almost 5%. the dividend, by the way, $7 on common, payable december 18th to shareholders of record december 10s. it is a $3 billion payout. they're going to finance some of that. they also announced comps for november as well. 6%, above the estimate of about 5